(Radio Iowa) – The Iowa State Extension survey found that average price of an acre of farmland dropped in 2024, breaking a five-year trend of increases. I-S-U extension economist Rabail Chandio conducts the survey and says the one trend that didn’t change is the type of people buying farmland. “The highest demand for our farmland comes from existing farmers. They may be existing local farmers or existing relocating farmers, but 70 percent of all farmland demand came from this group,” she says. Chandio says 23 percent of the farmland purchases were by investors.

“These investors include local as well as non local investors. They may include absentee landowners. They may include people who are next generation farmers or and they are not manually farming. They’re not personally farming, but they do want to keep connected with their legacies, and they’re buying farmland,” she says. Chandio says the investors in Iowa aren’t usually the institutional investors or big companies or individual big name billionaires. “It includes a lot of maybe Iowa residents, or previous Iowa residents, or residents from our neighboring states who are showing interest in our farmland,” Chandio says. “It also includes the demand for recreational ground that is more pronounced specifically for southern Iowa.”

The recreational purchasers are using the farmland in southern Iowa for hunting, and she says that’s whey it had three-point-six percent increase in value. Chandio says Iowa farmland doesn’t usually come up for sale until the owner dies or decides to retire. “Estate sales is the largest category contributing 57 percent of the land that was up for sale this year. Retired farmers is the next biggest category, making up for 22 percent of all land that was available for sale,” she says. Chandio says the long-term landowners have paid it off, and that gives them some protection against economic swings. “Eighty-four percent of all Iowa farmland is owned debt free, so those who already own it are not feeling the interest rates, which is why it is a negative pressure, but it has not been enough to really tip over the markets in the last year either,” she says.

Chandio says the high interest rates create the most pressure for beginning farmers and can really make them struggle.